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5.Troubled companies

This category contains 242 posts

13 Feb 2019 (TheAge) – Nearly $60 million in customer money mixed up at collapsed broker

(13 February 2019, The Age, Business, p25, by Sarah Danckert) ‘Administrators picking through the wreckage of one of the country’s largest online broking houses Halifax Investment Services, have found that $57 million in money invested by clients has been mixed up with funds belonging to the company. Halifax collapsed before Christmas, freezing $210 million invested … Continue reading

6 Feb 2019 (TheAge) – Hayne report kicks true reform down the road … again

[COMMENT: Here is a good summary of financial institution disasters in recent years, including the highlighted ones below. But why do they continue to happen, almost cyclically?] (6 February 2019, The Age, p21, by Andrew Linden and Warren Staples) ‘Every 10 to 15 years it’s the same. Since financial deregulation in the 1980s, we’ve had … Continue reading

30 Jan 2019 (AFR) – Tesco to cut thousands of jobs as part of wide-ranging corporate overhaul

(30 January 2019, AFR, p25, by: Josephine Cumbo and Jonathan Eley) ‘London | Tesco plans to slash thousands of jobs as the UK’s largest supermarket group embarks on a shake-up to cut costs in the face of intense competition. Tesco said on Monday that about 9000 positions were at risk as it reviewed in-store fresh food … Continue reading

22 Jan 2019 (AFR) – RemaPak decline illustrates ‘trauma’ for gas-based manufacturers

(22 January 2019, AFR, p6, by Angela Macdonald-Smith) ‘The decline into voluntary administration of polystyrene cup manufacturer RemaPak has revived concerns that whole sectors of industry will be unable to withstand the new reality of higher gas prices on the east coast, with gas-based chemical manufacturers seen most at risk.’ Read more at AFR.com (might … Continue reading

18 Jan 2019 (AFR) – Aged care has been a profitable short for Monash Investors

(18 January 2019, AFR, p19, by Jessica Gardner) ‘Monash Investors principal Simon Shields has warned aged care investors to prepare for a torrid year that will weigh on the share prices of Estia Health, Japara Healthcare and Regis Healthcare as the royal commission kicks into gear. Not that he is worried. Short-selling the sector’s three … Continue reading

17 Jan 2019 (AFR) – ‘We will go broke’: Subcontractors, ATO owed millions in Merhis collapse

(17 January 2019, AFR, p29, by Larry Schlesinger) ‘The collapse of companies tied to Western Sydney developer and builder Merhis Group has cut a path of destruction among subcontractors and suppliers at the same time as the Australian Tax Office chases tens of millions of dollars in unpaid taxes. Amid the scrutiny on apartment construction following … Continue reading

10 Jan 2019 (AFR) – Crabtree & Evelyn shutting up shop in Australia

(10 January 2019, AFR, p15, by Matthew Cranston) ‘Beauty and home products retailer Crabtree & Evelyn is the latest retailer to fall victim to lower discretionary spending by under-pressure households, with restructuring experts KordaMentha appointed to close down the entire Australian network of stores. “We decided to execute the close-down of Crabtree & Evelyn in … Continue reading

9 Jan 2019 (AFR) – UBS economist Arend Kapteyn says global economy slowing more than feared

(9 January 2019, AFR, p19, by Jonathan Shapiro) ‘UBS economist Arend Kapteyn says the global economy has slowed by more than he initially feared as recent data dispells hope that growth has stabilised. “The glimmer of stabalisation we saw in December was a head-fake,” the economist told clients in Shanghai for the UBS Greater China … Continue reading

9 Jan 2019 (AFR) – Kathmandu down… is The Reject Shop next?

(9 January 2019, AFR, p14, by Sarah Thompson and Anthony Macdonald) ‘Earnings downgrades rarely happen in isolation. One in a particular sector will often bring a second, while one at a company will often be followed up with another in the not too distant future. So fund managers are on high alert following Kathmandu’s softer … Continue reading

8 Jan 2019 (AFR) – Sears prepares for possible liquidation as ESL bid fails

[COMMENT: Is this really a good indication of how tough it is in the retail environment, when a very large retail institution closes?] (8 January 2019, AFR, p19, by: Eliza Ronalds-Hannon and Lauren Coleman-Lochner) ‘Sears Holdings is preparing to wind down after chairman Eddie Lampert’s bid to buy several hundred stores out of bankruptcy fell … Continue reading

4 Jan 2019 (AFR) – Why Apple iPhone users are breaking the upgrade cycle

(4 January 2019, AFR, p16, by Natasha Gillezeau) ‘Apple commentator and loyal iPhone user Remy Numa remembers queuing for hours back in 2008 at the Sydney Apple store to buy his first iPhone. But when Apple’s latest round of devices – the iPhone XR, iPhone XS, and iPhone XS Max – hit Australian shelves in … Continue reading

21 Dec 2018 (AFR) – BWX slashes full-year outlook, stock tumbles 47pc

[COMMENT: Note to self… When studying the price charts, and noting a fall in the share price, look for company announcements, and especially an earnings or profit downgrade. If so, it might be time to close an open position.] (21 December 2018, AFR, p19, by Carrie LaFrenz) ‘Just days before Christmas, BWX Limited has revealed … Continue reading

17 Dec 2018 (AFR) – IOOF one step away from forced restructure

(17 December 2018, AFR, p1, by James Frost) ‘IOOF is one step away from a forced restructure after the Australian Prudential Regulation Authority was prompted to perform an emergency downgrade of its risk rating of the company because of fears it posed a threat to its customers and/or the Australian financial system.’ Read more at … Continue reading

12 Dec 2018 (AFR) – Treasury Wines’ painful $4 billion spillage

[COMMENT: Technical analysts (aka chart readers) could have spotted a potential loser here, some months before the share price tanked. They would have trimmed any losses and quite the stock.] (12 December 2018, AFR, p17, by Simon Evans) ‘Old-school investors who believe share sales by directors and top executives are a potential danger signal have … Continue reading

10 Dec 2018 (AFR) – ‘Frank Squared’: Circularity of Quintis deal examined in receivers’ hearings

[COMMENT: This interesting news story brings some great insight into what can sometimes happen behind the scenes with managed funds.] (10 December 2018, AFR, p20, by Vesna Poljak) ‘The Abu Dhabi Investment Council was able to exit $10 million of plantations managed by the sandalwood grower Quintis by virtue of a three-way transaction financed by … Continue reading

10 Dec 2018 (AFR) – AMP class action beauty parade turns ugly

(10 December 2018, AFR, p19, by Misa Han) ‘On May 9, a day before AMP’s annual general meeting, boutique class-action specialist Quinn Emanuel filed the first class action against the wealth giant in the NSW Supreme Court.’ <snipped…> ‘It turns out Quinn Emanuel wasn’t the only law firm working towards a tight deadline. At 10.56 … Continue reading

7 Dec 2018 (TheAge) – Freedom Insurance shares halved on liquidity warning

(7 December 2018, The Age, Business, p28, By John Collett & Sarah Danckert) ‘Investors have wiped out almost half embattled Freedom Insurance Group’s market capitalisation after it warned it may face a liquidity shortfall and admitted it was under investigation by the corporate watchdog for misconduct highlighted by the banking royal commission. The company said … Continue reading

4 Dec 2018 (AFR) – RCR Tomlinson creditor claims forecast at $630m; investors last in the queue

(4 December 2018, AFR, p14, By Jenny Wiggins) ‘RCR Tomlinson’s administrators are likely to be hit with about $630 million in financial claims after the engineering group collapsed but most creditors will only get paid if the company receives “strong” offers for its asset sales, McGrathNicol has warned. Shareholders who hold RCR stock are at … Continue reading

4 Dec 2018 (AFR) – Slowdown hits third of smaller malls as e-commerce bites: Little Guns report

(4 December 2018, AFR, p31, by Nick Lenaghan) ‘One-third of the country’s sub-regional shopping centres failed to increase their annual turnover in the past year as the retail sector faces pressure from disruption and a cyclical slowdown. Sub-regional malls, defined as those with between 20,000 square metres and 50,000sq m in retail space, are often … Continue reading

4 Dec 2018 (AFR) – Roger David retailing chain leaves a $30m hole for landlords

(4 December 2018, AFR, p17, By Simon Evans) ‘Thirteen shopping centre landlords have been left with a combined $30 million problem after the demise of menswear retailer Roger David. Structural shifts in the sector are weakening the position of shopping centre and shop owners as the percentage of online shopping transactions rises and $2 billion-plus … Continue reading

4 Dec 2018 (TheAge) – Laura Ashley collapses for the second time in two years

(4 December 2018, The Age, Business, p25, by Patrick Hatch) ‘British homeware and fashion brand Laura Ashley’s Australian business has gone into administration – the second time it has collapsed in two just years. The company appointed KordaMentha as voluntary administrators on Monday, which has put its 18 stores and the licence to operate the … Continue reading

3 Dec 2018 (AFR) – Kingscliff hedge fund Goldsky’s ‘plastic surgery spree’ forced ASIC action

[COMMENT: Have you ever wondered if your managed fund monies are being invested appropriately? It has been alleged that some funds aren’t. Read the details below.] (3 December 2018, AFR, p1, By Jonathan Shapiro) ‘Goldsky, the Kingscliff-based hedge fund that is being sued by US regulators, spent more than $200,000 on cosmetic procedures, beauty treatments, … Continue reading

28 Nov 2018 (TheAge,SMH,MONEY) – RCR Tomlinson’s collapse has lessons for retail investors

[COMMENT: This article from Marcus Padley includes some great comments and insights – well worth reading the full article.] (28 November 2018, The Age, MONEY supplement, p2, By Marcus Padley) ‘Last year, RCR Tomlinson was a billion-dollar company. Last week, it went into administration. RCR went bust with a market capitalisation of $231 million. Two … Continue reading

23 Nov 2018 (AFR) – RCR Tomlinson to be split up and sold after ‘staggering’ collapse

(23 November 2018, AFR, p19, by Jenny Wiggins) ‘Engineering group RCR Tomlinson will be sold after being put into administration because it could not afford to complete its solar farm projects, despite the company raising $100 million from investors just three months ago. Administrators McGrathNicol will put RCR up for sale immediately, and it is expected that … Continue reading

12 Oct 2018 (AFR) – US retail giant Sears prepares to file for bankruptcy as shoppers go online

(12 October 2018, AFR, p14, by Jessica DiNapoli and Mike Spector) ‘New York | Sears Holdings is preparing to file for Chapter 11 bankruptcy protection in the coming days following years of declining sales, sources said, casting doubt over the survival of what was once the world’s largest retailer. The bankruptcy filing would end a … Continue reading

28 Aug 2018 (AFR) – Big Un appoints Deloitte as administrator

(28 August 2018, AFR, p19, by Jonathan Shapiro) ‘Big Un Limited, the controversial ASX listed online video producer has called in the administrators, dashing the faint hope among shareholders that they will recover their money. Deloitte Restructuring Services said it was appointed on Friday in a statement posted to the exchange on Monday. It comes … Continue reading

21 Aug 2018 (AFR) – Venezuelans nervously await drastic new economic measures – Workers promised 2000 percent pay rise

(21 August 2018, AFR, p12, by Scott Smith) ‘Caracas | Venezuelan shopkeepers and consumers are nervously awaiting the launch of dramatic reforms announced by President Nicolas Maduro to rescue a downward-spiralling economy, including a new currency and a more-than-3,000 per cent hike in the minimum wage.’ Read more at AFR.com (might need AFR login access, … Continue reading

15 Aug 2018 (AFR) – Downward spiral: Turkey’s toxic situation has markets spooked

(15 August 2018, The Age, Business, p35, by Ambrose Evans-Pritchard) ‘The famous Dornbusch’s Law of financial crises is that they take longer to hit than you think, but then unfold much faster than you ever thought possible. Every hedge fund in London knew that Turkey was an accident waiting to happen. It was odds-on favourite … Continue reading

9 Aug 2018 (AFR) – ‘Cloud cuckoo land’: Brookes lashed in Myer profit guidance class action

[COMMENT: Some investors are firm believers in particular stocks. Over the years, some investors in Myer Holdings would have been firm believers. Many of these investors ignore warning signs that things are not right, and continue to hold the stock. I am sure there were many investors in Myer throughout time. But some investors would … Continue reading

28 July 2018 (AFR) – Facebook’s day of reckoning rocks new media

(28 July 2018, AFR, p12, by Sarah Frier) ‘After all the controversy Facebook has generated in recent months, it seemed almost inevitable that at some point, the social media giant would get what it had coming. A reckoning. Wednesday’s disappointing earnings report and Thursday’s historic 19 per cent stock drop appeared to be a fitting conclusion … Continue reading

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